Markets slip into red after a modest gap-up start

The enthusiasm of Lok Sabha endorsing a government decision to allow the entry of overseas retail chains through FDI in multi brand retail proved momentary and the markets after getting a small gap-up start have lost their way completely in the early trade. The concern grew that though the government might have sailed through in Lok Sabha, it will have trouble in Rajya Sabha, as the numbers in the Upper House is tilted in favour of the Opposition. Also there was pessimism with investment banker Credit Suisse lowering economic growth of India to 5.9 per cent from 6 per cent for the fiscal year ending March. Back on street, sell-off has aggravated at all the counters and none of the sectoral gauges were trading in green despite getting a positive start. IT and technology continued their plunge and were the laggards of the early trade, while the smart movers of last some sessions’ realty and power too were suffering profit booking, even the defensive sectors FMCG and healthcare were trading in red.

The BSE Sensex opened at 19,475.09; about 85 points higher compared to its previous closing of 19,391.86 and has touched a high and a low of 19,491.60 and 19,217.06 respectively. The index is currently trading at 19,255.53, down by 136.33 or 0.70%. There were just 3 stocks advancing against 27 declines on the index.

The market breadth on the BSE was in favour of declines; there were 836 shares on the gaining side against 899 shares on the losing side while 83 shares remain unchanged. The broader indices were trading mixed; the BSE Mid cap index was down by 0.07%, while Small cap index gained 0.11%.

None of the sectoral indices on the BSE was in green, while IT down by 1.58%, TECk down by 1.33%, Realty down 0.91%, Power down by 0.83% and Oil & Gas down by 0.81% were the major losers on the BSE.

The three gainers on the Sensex were Bajaj Auto up by 0.81%, Jindal Steel was up by 0.09% and HDFC was up by 0.06%.

On the flip side, Infosys down by 1.95%, TCS down by 1.71%, Wipro down by 1.40%, Sterlite Inds down by 1.33% and ONGC was down by 1.29% were the top losers on the Sensex.

Meanwhile, the Union cabinet is going to consider a proposal for setting up of National Investment Board (NIB) for quicker implementation of projects entailing investments in excess of Rs 1,000 crore. It has been said that there are a little over 100 projects, each involving investment of Rs 1,000 crore or more, that have been delayed for various reasons. The cabinet will consider constituting a Cabinet Committee on Investment or National Investment Board whose main objective will be overseeing and monitoring large projects. There is proposal to constitute a dedicated secretariat for the proposed body to be located in the Cabinet Secretariat. Once the decision of the body is notified, it will be binding on all the ministries and departments.

The NIB proposal that faced strong opposition from the ministry of environment and forests (MoEF) was to be a three-member body chaired by the prime minister to facilitate quicker implementation of infrastructure projects entailing investment of Rs 1,000 crore, which could have been enlarged to include manufacturing projects above Rs 1,000 crore. Environment minister Jayanthi Natarajan had earlier written to the Prime Minister opposing any move to bypass required green clearances for mega projects.

After the Cabinet meeting, the Cabinet Committee on Economic Affairs (CCEA) is also likely to discuss the proposals of a new investment policy for urea and continuation of additional compensation to indigenous manufacturers of potash and phosphorus.

The S&P CNX Nifty opened at 5,926.30; about 26 points higher from its previous closing of 5,900.50, and has touched a high and a low of 5,927.75 and 5,846.45 respectively. The index is currently trading at 5,860.25, down by 40.25 points or 0.68%. There were 7 stocks advancing against 43 declines on the index.

The top gainers of the Nifty were Bajaj Auto up by 0.81%, JP Associates up by 0.70%, BoB up by 0.33%, Jindal Steel up by 0.14% and HDFC was up by 0.13%.

On the flip side, Infosys down by 1.95%, TCS down by 1.84%, HCL Tech down by 1.41%, Hindalco down by 1.40% and ONGC down by 1.40% were the top losers on the Nifty.

Asian markets continue to trade mixed, Shanghai Composite was down by 0.32%, Hang Seng lost 0.03%, Straits Times was down by 0.14% and Taiwan Weighted was trading down by 0.19%.

On the other hand, Jakarta Composite was higher by 0.16%, KLSE Composite was up by 0.19%, Nikkei 225 was up by 0.77% and Seoul Composite was up by 0.14%.